Jaclyn McCosker

Sep 1 Budget Tips from a girl living on 75% of the minimum wage

On a weekly income of 75% of the minimum wage, I rank in the bottom 12% of Australian incomes. My income is just 20% above the Australian poverty line.

So how do I actually survive while being unable to work? (Blog about my health here.)

‘Minimalist’, ‘eco’ and ‘budget’ are three lifestyle aspects that are inseparable from each other because all involve consuming less and consuming smarter.

Here are my tips on managing a small budget and living a minimalist, eco-conscious lifestyle so I can afford to eat out, dress well and travel!

Detailed monthly budget

I live and die by my budgets. I keep a running 12-month budget in a Google Doc, which is free and accessible from both my phone and computer. For 6 months ahead I log in all my expected expenses (rent, phone plan, bills, public transport, groceries, etc) and that gives me an idea of what I have in the way of spending money. Then when I know there’s an event coming up, Christmas as an example, I can build my savings for things like presents and flights home into my expenses and adjust how much to save per month depending on how many other commitments I have. This allows me to know what months I can afford to do things like get my hair done, and what months I have to knuckle down and say no to social engagements.

Then, I record every purchase I make and deduct it from my allocated social budget or any leftover unbudgeted money, to ensure I never overspend and run out of money prematurely. Budgeting simply doesn’t work if you leave any expenses uncounted. Planning so vigilantly and being so mindful of each purchase gives me the freedom to pursue lots of adventures, like three international holidays this year. So while I rarely have any spending money on a near-poverty level income, I make these sacrifices and I prioritise my life to allocate my money where it’s needed.

Lists, lists and more listsPerhaps it is just a Virgo thing but nonetheless, list-making is a trait you should all try to adopt. In my phone, I keep permanent lists of things I need under different categories such as ‘clothes’, ‘beauty’ and ‘house’. This includes kitchen supplies I wish we had, new linens when my current ones are starting to fade, and items of clothing for upcoming events or the change of season. I plan ahead and keep records of the things I need to avoid me ever buying something I don’t need. I don’t usually have spending money, so when I do it’s imperative that I spend it wisely. Keeping on top of these lists is what helps me function. Plus, they later become birthday or Christmas lists – pushing the cost of living down even further!

The other list you need is your grocery list. The trick to budget food shopping is setting an upper grocery limit and standing by it, I allocate $200/mth. I manage my grocery budget by having clear pantry staples I stick to without trying to recreate the wheel every week. You don’t need to eat something you’ve never had before every night. Stick to the trusty faithful recipes and when your current supplies run low, replenish that stock instead of spending money on something new which sticks you with a cupboard full of half-used products. It’s better for your wallet and better for the environment to do things this way.

Plant-based wholefoodsIf you care about saving money you’ll get as much produce as you can from farmers markets and limit your consumption of packaged junk food. There’s no cheaper diet than grains, beans and fresh fruit and vegetables. Sometimes the food on the shelf may seem cheap, but you should really be allocating your money towards filling food that actually nourishes you and fulfills your nutrient requirements. Eating low cost junk food isn’t going to keep you full, and if you're overeating the bill adds up.

Many complain that vegetables are expensive when they have to add it to the side of an already expensive meat dish to make sure they’re getting the right nutrition. An easy solution? Cut the meat and make your RDI of vitamins and minerals the core of your meal. Use vegetables as the staple and build your meal plan around them. Vegetables aren’t an extra expense on top of your groceries, they are your groceries.

The more natural plant foods you buy, the less you need to pay for all the years of breeding, rearing, slaughtering and processing that goes into meat, dairy, and eggs. The Meatless Monday movement strongly advocates cutting down your animal consumption to save big $$. The animal ag industry is huuuuuuuuuuugely expensive, even after the billions of dollars of government bailouts. But beans and rice? They be cheap.

Quit any vicesI mean, duh. Nobody with a saving goal drinks or smokes. I cut back drastically on drinking the day I decided to start travelling at age 21 because having a life is much more important than drinking until I black out. Australia’s tax on alcohol makes it completely unreasonable and unsustainable to have a drinking habit at this point.

Get 30 wears out of each clothing pieceThe global fashion industry is valued at 3 trillion dollars. TRILLION. Most women have closets full of clothing they’ll only wear once, and some they’ve never worn. The average American throws away 30kg of clothing every year, which is a lot of clothing that could have been reused by someone else or the fabric could have been recycled.

Fashion also happens to be the second worst polluting industry right after oil. It’s even worse than the animal agriculture industry on water pollution because chemicals used to dye and process clothes leech straight back into the environment.

The reason? We are obsessed with constantly buying new clothes, because “fashion” dictates each outfit has to be original.

The solution? Stop. Buying. More.

To ensure the primary resources and non-renewable energy that went into each item of clothing was worth the cost to our bank account and the cost to the Earth, Livia Firth (founder of People Tree and one of the faces being the movie The True Cost) recommends each item is worn at least 30 times. Take a look at your closet, have you worn it all 30 times? If not, it’s probably time to drastically curb your clothes shopping and take a good hard look at your spending habits.

Minimalist wardrobes are both good for the wallet and good for the environment. By being more conscious of your purchases you can ensure you’re purchasing high-quality garments you’ll actually get use out of, justifying the financial investment. Keep lists of clothing you need and not just what you want, and ensure you get good use out of everything before deeming it “last season” and buying something new.

Set a 24 hour cool-off period for purchases over $50I will sleep on every purchase of $50 or more because while you might really want something when you see it, some time away from the item may bring you some clarity when you realise it’s just too much and you can definitely live without it. This cool-off period definitely saves me from a lot of pretty underwear and camera accessories I absolutely do not need.

Decide what rent you can afford, then lower it by 10%Living above your means is for chumps. A home is what you make of it. The place doesn’t have to be 5-star to be nicely decorated or to become your cosy oasis. When you’re living on a tight budget, you’ll definitely appreciate when it comes to the end of the month and you have that extra $70 in your bank because you scrimped on accommodation to improve your quality of life. Australia considers spending more than 30% of your income on rent as experiencing housing stress, and 15-20% is the recommended amount.

Fortunately, I moved to the most affordable capital in Australia (the world’s most liveable city) so I can keep my rent on the border-line at 30% of income by living in 1 or 2 bedroom units. It’s hard for me to do much better as we’re already scraping the lowest rent bracket on the market, but my boyfriend's half of the rent compared to his higher income is well within the normal zone. So for those with jobs, living below your means should be a piece of cake! Everybody reading should be living on a lower rent:income ratio than me!

Switch to a prepaid phone planThis advice I could have used 8 years ago. I now use Amaysim and would never change. $30 for 3GB data and unlimited texts and calls, or $40 for 7GB data and unlimited texts and calls. Because it’s as easy as clicking a button online I switch between these two plans month by month depending on my data needs. No more of those riDONCulous $60 plans friends still use!

There’s so much more I could talk about in the quest of living cheaply, but the overall message is this: Conscious consumerism.

Understand your budget, be conscious of each expense, know the value of your purchases and reconsider your priorities and where you really want to focus your money.

My next holiday is Bali in October. We bought the tickets on sale, are staying in a mid-range hotel at $100/night, and I’ve shaped my budget for the next few months around this saving goal. When you count your pennies and prioritise what matters, you really can live a good life.